Consumer inflation in Brazil accelerated more than market participants expected in the period leading up to mid-February, official statistics show, with implications for monetary policy timing and segments of the economy sensitive to price swings.
According to data released by the national statistics agency IBGE, the IPCA-15 index rose 0.84% in the month to mid-February. That result is the fastest monthly advance in a year and compares with the median estimate of 0.57% from a Reuters poll of economists.
On an annual basis, inflation measured by the IPCA-15 stood at 4.1%, down from 4.5% in the prior month but above the 3.82% analysts had expected. The central bank targets inflation at 3%, plus or minus 1.5 percentage points, and has signaled that it will begin lowering interest rates in March after keeping them at a near two-decade high of 15% since mid-2025 to rein in persistent inflationary pressure.
IBGE attributed the monthly uptick primarily to higher costs in transportation and education, highlighting a jump in airfare prices and annual tuition adjustments as key contributors to the rise.
Economists responding to the print judged that the upside surprise is unlikely to prevent the central bank from initiating an easing cycle next month, but they warned it could make a larger, 50-basis-point reduction less probable.
From Capital Economics, emerging markets economist Kimberley Sperrfechter noted that much now hinges on forthcoming data - specifically next week’s gross domestic product figures and the full-month inflation release. "As things stand, we continue to expect a 50bp cut, but the risks to this view have grown," she wrote in a client note.
Pantheon Macroeconomics’ chief Latin America economist Andres Abadia observed that, despite the seasonal firmness in education and the transportation components, the overall disinflationary trend remains "broadly intact," a condition he said should permit a 50-basis-point reduction in March.
The stronger-than-expected IPCA-15 reading highlights pressure points for specific sectors - notably air travel and private education - and underscores the sensitivity of monetary policy decisions to short-term swings in these services prices. Policymakers will weigh these data against the broader trajectory of output and inflation ahead of their next decision.